Former ambassador to EU: 15 percent tariff can be baked into profit margins
In an interview with CNN's Jessica Dean, Sondland was asked to respond to folks who see the 15 percent tariff on imported goods and are worried that, for example, their perfume bottles from France will now be 15 percent more expensive.
He said Americans might initially see higher prices, but they will soon adjust as competition returns to the market.
'At 15 percent, I think consumers will initially pay, but I also think that this will be baked into the profit margins — or a reduction of the profit margins — on a lot of these products, because the market will start to pull prices back down again as there's more competition,' he said.
Sondland said a 15 percent rate will generate enough revenue to make a dent in the reduction of the annual deficit.
'I think at a 15 percent tariff, it's enough to generate. If everything that we imported bore a 15 percent tariff, that would generate about $450 billion for the United States Treasury, which would make an enormous dent in our annual deficit,' Sondland said.
'If the tariff were 30 or 40 or 50 percent, that would be an absolute shutdown, so that wouldn't work. But 10 to 15, I think we can swallow it, and I think it's going to generate a tremendous amount of money if Congress doesn't piss it away on other things,' he added.
Trump and President of the European Commission Ursula von der Leyen announced a trade deal on Sunday, setting tariffs at 15 percent for European goods, including automobiles.
The European Union will purchase $750 billion worth of energy from the U.S. as part of the deal, Trump announced, and agreed to invest in the U.S. $600 billion more than the current investments for other goods.
The agreement is lower than the 30 percent tariff Trump had threatened to impose on the EU, which would have begun on Friday, and avoids a trade war with the U.S.'s largest trading partner.
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